USDJPY convincingly broke above the key 113.50 resistance level. Not just that but also trades above its 100-Day MA comfortably. What next? 09 May USDJPY daily technical outlook should give us an insight.
09 May, AtoZForex –The U.S dollar bulls seem to be back on the center stage as it continues to give all the major currencies real technical knock-out. The greenback has been on a total tear especially against the Japanese yen as it hits 8-month highs and broke the 103.50 key level. Apparently, investors are riding on dollar strength as a result of healthy Job market report last week. Some officials of the Fed registered their positive feelings as they see personal income to be rising in addition to the healthy labor market and of course, confidence keeps improving.
Mester spoke Monday and said she doesn’t “subscribe to a wait-and-see attitude on rates,” while Bullard said in as much as he doesn’t condone a 200bp rate hike “near-term policy moves are ok.” Even Evans with a dovish tilt believes that the fundamentals of the economy are sound. On the other hand news from Japan indicates that despite BOJ’s best efforts to reflate the economy, serious challenges remain for Governor Kuroda. Real wages report was seen to have slowed down dropping -0.8% versus a forecast of 0.5% rise. The decline in real wages poses a serious setback to Governor Kuroda’s program of aggressive monetary easing and will likely delay his goal of achieving 2% inflation rate. Fundamentally, USDJPY should continue to tread on a positive path.
09 May USDJPY daily technical outlook: Daily Chart
USDJPY convincingly broke above the key 113.50 resistance level. Not just that but also trades above its 100-Day MA comfortably. This is a positive development going forward. We have consistently talked about the bullish wedge being carved out by the corrective decline of the USDJPY. Finally, I think the breakout is here. Going forward, our next focus should be 115.50. Although, ultimately 118.00 should be an ideal target. However, retracement along the line shouldn’t be ruled out especially around the 115.50 handle.
09 May USDJPY daily technical outlook; 4H Chart
From the hourly perspectives, the language isn’t any different from that of the daily frame. After a prolonged corrective decline, the spot finally broke away from the channel (Bullish wedge). The cycle of the 4 hourly frame is expected to complete around the 115.50 handle. However, a decent retracement is expected at the 115.50 resistance zone.
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